How long does it take your credit to recover after a major financial event? Building a good credit score takes a long time, and it can be discouraging to see that hard work ruined — and even more discouraging if you feel that you’ll never be able to reach a higher credit score again. The good news is that, with time, you can rebuild your credit. Here’s what you can expect:

How Long Does It Take Your Credit to Recover After a Missed Payment?

Unfortunately, it takes longer to build a score than it does to let it drop, which is why it’s a smart idea to schedule automatic payments or make calendar reminders to ensure you don’t lose points for carelessness alone (think about it like trust — it takes only one second for a friend to break your trust, and a long time for them to regain it). Simply bringing the account up to date isn’t enough; you’ll need to establish a history of on-time payments. Increases of 10 to 15 points can often be achieved in a few months, though late payments will remain visible in your file for about seven years. After two years, it’s highly unlikely these minor events will affect your credit.

How Long Does It Take Your Credit to Recover After a Settlement?

It can take several years to recover from debt settlement, especially if you’ve settled multiple accounts. However, settling and then starting over, establishing new strategies to manage funds and keep debt balances low, can be a good strategy in the long run. The important thing is to face up to the problem and communicate with your creditors rather than hoping the situation will improve on its own — it won’t.

How Long Does It Take Your Credit to Recover After Bankruptcy?

The bad news is that bankruptcy can negatively affect your credit for seven to 10 years, and precipitates the greatest possible drop in your credit score of all financial happenings. However, this may be the only option for people who cannot meet their obligations. Unlike settlements, which are typically handled between private parties, bankruptcy is a legal status and must be filed for in federal court. Because of this, it’s often a good idea to get bankruptcy help from a local bankruptcy attorney who can show you how to file bankruptcy (there are three kinds, so you’ll need to figure out which one is appropriate) and help you negotiate the process to give you the greatest possible advantage when it comes to eliminating debt while retaining some assets.

Do you have any advice on how or when to file bankruptcy? Share your experience in the comments.

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